The firm's initial concern is with transferring profits earned overseas back to the United States. Since all of the countries they do business with are members of the European Union, all foreign earnings are denominated in Euros. Discuss the following in complete paragraphs: 1. How can the firm use the Foreign Exchange Market to their advantage? 2. The firm's managers want to know if they should consider hedging their foreign profits. They ask you to evaluate the dollar-euro exchange rate to determine the size of the risk they are taking by not setting up a hedge. Discuss the issues that should be considered in deciding whether the firm should set up a hedge. 3. Cash flows from the last several years have been so good for the firm that it finds a need to invest its excess for about a year. After this time he cash will be needed to fund its expansion plans. The CFO has noticed that the interest rates offered on government bonds issued in some of the developing nations where the firm plans to expand have much h